Peabody earnings report details continued capital discipline

Steamboat Springs  Peabody Energy, which operates Twentymile Mine in Routt County, continues to focus on capital discipline and cost containment, according to the energy and mining company’s first quarter earnings report for 2014.

“First quarter capital investments were the lowest in 10 years, and 2014 capital targets have been reduced to $250 to $295 million,” the earnings report states. “Current spending is allocated primarily to sustaining capital items, with major new projects dependent on market conditions.”

Although Twentymile is the largest mine in Colorado, the 7.2 million tons of coal it produced in 2013 is dwarfed by the 110.9 million tons coal produced by Peabody’s North Antelope Rochelle Mine, which is the largest in the U.S., in Wyoming’s Powder River Basin.

King Coal

Learn more about the underground economic engine that is Routt County's Twentymile Coal Co.

Discussion of the U.S. coal market during the earnings report and quarterly call focused on Peabody’s Powder River Basin holdings. There was no mention of Twentymile or the delayed project to switch production to the Sage Creek portal a few miles northwest of the current portal.

There are a number of capital projects Peabody is working on now, including ramping up production at its North Goonyella Mine in Australia and developing reserves at the Gateway North Mine in Illinois.

The unusually cold winter that hurt multiple other sectors of the U.S. economy proved to be a boon for Peabody’s U.S. coal holdings.

Demand for energy generation was up and coal stockpiles were drawn down while prices were up for Southern Powder River Basin coal.

Utility purchasing is expected to increase, according to the earnings report, and demand for Southern Powder River and Illinois basin coal is expected to grow.